Confiscation of consumed raw materials under excise rules was unsustainable where only finished goods were removed illicitly.

Raw materials consumed in manufacture could not be confiscated, and redemption fine was unsustainable, where the record showed that only the finished goods were later cleared illicitly. Rule 209 of the Central Excise Rules, 1944 applies to excisable goods removed from the factory, and there was no evidence that the raw materials were cleared as such. The goods sought to be confiscated were also not available for confiscation, and no basis was shown for imposing redemption fine. The first appellate authority's finding was therefore maintained.

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Issues: Whether raw materials used in the manufacture of finished goods could be confiscated and redemption fine imposed under Rule 209 of the Central Excise Rules, 1944.

Analysis: The first appellate authority had recorded a finding that the raw materials were consumed in manufacture and that only the finished goods were subsequently cleared illicitly. Rule 209 contemplates confiscation of excisable goods removed from the factory, and there was no evidence that the raw materials were cleared as such. The goods sought to be confiscated were also not available for confiscation, and the record did not show any basis for redemption fine.

Conclusion: Confiscation of the raw materials and the redemption fine were not sustainable, and the order of the first appellate authority was upheld.

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